Yesterday we talked about the disconnect between the daily drama from the media in Washington (doom and gloom), and what the markets have been communicating (an economic expansion is underway). Today, you might think that connection is happening — the doom and gloom scenario is finally being realized in markets. Probably not.

For perspective: As of the close yesterday, the Nasdaq was up 18% year to date (just five months in). Gold was in the middle of a three year range. Market interest rates (the U.S. 10-year government bond yield) was just above the middle of the range of the past four years. The dollar was not far off its strongest levels in 15 years.

Today the media has explicitly printed the headline of impeachment for Trump (actually, they’ve run those headlines a various times over the past several months). Nonetheless, stocks (the S&P 500) today are off by 1.6%.

This gets the bears very excited. I saw the story about consumer debt, surpassing 2008 levels, floating all over the internet today. People tried to make the bubble connection — implying another debt crisis was coming.

The real story: Total household indebtedness finally surpassed the previous peak from 2008. That’s precisely what the Fed was attempting to do with zero interest rates. Make existing debt cheaper to manage, and at some point, break the psychology of the debt burden and get people borrowing (at ultra-cheap rates), investing and spending again. Otherwise, our economy and the world economy would have gone into a deflationary spiral.

That said, as I’ve found in my 20 years in this business, people tend to find a story to fit the price. The story hadn’t been fitting the price for much of the past six months. Today, it seems pretty easy. See the chart below of stocks ….

​We had the first breakdown of the Trump trend in March, but all it could muster was about a 3% correction. This looks much more like a technical correction (a double top, and trend break today) – than a Trump impeachment trade. I suspect with the earnings catalyst behind us, this is the start of a deeper technical correction, which is healthy in a bull market. And it may take significant progress made in tax reform to see new highs in the broad stock indicies. We shall see.​This next chart is the dollar index. This too had a significant trend break today. This translates into a higher euro, which would spell out a story where Europe is improving and the ECB is able in start discussing exit from QE.

​What about the Trump/Comey saga? Aren’t people dumping dollars because of that? Not likely. If that were potentially destabilizing to the U.S., it would be destabilizing to the global economy, and people would buy dollars not sell them.

With that in mind, here’s gold. Gold sits on the brink of a big trend break (higher). When looking at gold and the dollar, it’s important to remember this: back in the heat of the crisis, gold and the dollar moved together, higher! That’s opposite of the traditional correlation. They moved higher together because people bought gold and they bought dollars (and dollar denominated assets, like Treasuries) as they viewed it the safest alternative in the world to park money – with the chance of getting it back.

​With a break higher in gold looking imminent, and the dollar looking lower, it looks like a more traditional relationship. It’s not communicating crisis.

Follow This Billionaire To A 172% Winner

In our Billionaire’s Portfolio, we have a stock in our portfolio that is controlled by one of the top billion dollar activist hedge funds on the planet. The hedge fund manager has a board seat and has publicly stated that this stock is worth 172% higher than where it trades today. And this is an S&P 500 stock!

Even better, the company has been constantly rumored to be a takeover candidate. We think an acquisition could happen soon as the billionaire investor who runs this activist hedge fund has purchased almost $157 million worth of this stock over the past year at levels just above where the stock is trading now.

So we have a billionaire hedge fund manager, who is on the board of a company that has been rumored to be a takeover candidate, who has adding aggressively over the past year, on a dip.